There is ongoing interest in people who obtain work through labour hire firms and employment agencies (referred to as labour hire firms in this article). As well as contacting employers directly, some people engage the services of a labour hire firm to act as a third party to assist in matching them to a suitable employer. People who engage with labour hire firms are a diverse group and work in a range of jobs across various industries and occupations for a variety of reasons. Labour hire firms perform a number of functions in the labour market, including maintaining a pool of potential employees, matching a person directly with an appropriate employer and assisting employers to source suitable staff.

This article provides an overview of the characteristics of people who found their job through a labour hire firm, using data from the November 2008 Forms of Employment Survey.

OVERVIEW

Of the 10.7 million employed people aged 15 years and over in November 2008, 576,700 (or 5%) obtained their current job through a labour hire firm. This was down from 8% in 2001.

The majority of these people (97%) were employees, while 3% were independent contractors. As labour hire firms operate predominantly to provide employees to employer businesses, independent contractors are excluded from this analysis.

Employees may use a labour hire firm for a number of reasons. For instance, people seeking work may choose some additional support to help them find the most appropriate employer for their skills. Another reason is that particular occupations and industries are more likely to use a labour hire firm to obtain staff as part of their standard business operations.

The most common reason cited for employees using a labour hire firm was the ease of obtaining work (71%). Other reasons included:

a condition of working in the job or industry (9%)

flexibility (7%)

the inability to find work in their line of business (7%)

a preference for short-term work (3%)

to gain more experience (3%)

a lack of experience prevents finding permanent job (2%).

The relationship that a person may have with a labour hire firm varies. Once their job commences, some of these employees effectively cease involvement with the labour hire firm. They become employees of, and are therefore paid by, the 'host employer'. The majority of employees who found their job through a labour hire firm were not paid by the labour hire firm (78% or 439,000).

The remaining group can be considered employees of a labour hire firm, as they were paid by the labour hire firm. There were 122,200 people who were paid by a labour hire firm, a decrease from the 161,800 recorded in 2001. The remainder of this article focuses on those employees who were paid by a labour hire firm (labour hire workers).

AGE AND SEX

Almost two thirds (61%) of labour hire workers were men. The age profile of male and female labour hire workers was quite different. Male labour hire workers had a younger age profile, with over a third aged 15 to 24 years, compared with 9% of female labour hire workers. Similarly, a greater percentage of female labour hire workers were aged 45 to 59 years. This in part reflects the occupations and industries that labour hire firms supply labour for, and that men and women commonly work in, such as Technicians and trade workers and Machinery operators and drivers for younger men, and Clerical and administrative workers for older women. Labour hire workers had an age distribution that was concentrated more around the younger age groups than for employees generally.

1. LABOUR HIRE WORKERS AND ALL EMPLOYEES, Proportion within each age group, by Sex - November 2008

Labour hire workers

All employees

Males

Females

Persons

Persons

'000

%

'000

%

'000

%

'000

%

15 to 24

25.8

34.7

*4.5

9.4

30.3

24.8

1 730.2

20.1

25 to 34

23.6

31.7

15.0

31.4

38.6

31.6

2 027.0

23.5

35 to 44

14.5

19.5

15.1

31.6

29.6

24.2

1 931.4

22.4

45 to 59

*6.8

9.1

11.9

24.9

18.7

15.3

2 440.0

28.3

60 and over

*3.7

5.0

**1.4

2.9

*5.1

4.2

491.1

5.7

Total

74.4

100.0

47.8

100.0

122.2

100.0

8 619.6

100.0

* estimate has a relative standard error of 25% to 50% and should be used with caution

** estimate has a relative standard error greater than 50% and is considered too unreliable for general use

While the distribution of labour hire workers across states and territories was similar to that of all employees, there was a relatively high concentration of labour hire workers in New South Wales and a relatively low concentration in Queensland. For example, New South Wales had 31% of employees and 37% of labour hire workers. In contrast, Queensland had 21% of all employees and only 12% of all labour hire workers.

2. Distribution of labour hire workers and all employees, by State/Territory-November 2008

OCCUPATION

The predominant occupation group for female labour hire workers was Clerical and administrative workers (16,700 employees), followed by Professionals (11,800). For men, the most common occupation groups were Technicians and trades workers (18,700), Machinery operators and drivers (16,700) and Labourers (16,500).

3. Labour hire workers, by Occupation - November 2008

WORKING ARRANGEMENTS

Labour hire workers were more likely to work on a full time basis, with 75% working full-time, compared with 72% of all employees. Male labour hire workers were more likely to be part-time compared to all male employees (20% compared with 14%). In contrast, female labour hire workers were less likely to work part-time compared to all female employees (34% compared with 43%).

4. LABOUR HIRE WORKERS AND ALL EMPLOYEES, by Full-time/Part-time status - November 2008

Compared to employees generally, labour hire workers were more likely to be without paid holiday or sick leave entitlements (79% compared with 23%). The absence of paid leave entitlements is often used as a indicator of casual employment.

A greater proportion of labour hire workers were on a fixed-term contract basis compared to all employees (15% compared with 3%), while 60% of labour hire workers had been with their current employer for less than one year, compared with 23% of all employees.

The average hours worked by full time and part time workers paid by a labour hire firm were the same as the hours worked by employees generally (39 and 17 hours respectively).

FURTHER INFORMATION

For further information about the information presented in this article, please contact the Labour Market Statistics Section in Canberra on (02) 6252 7206 or email <labour.statistics@abs.gov.au>. For further information about the Forms of Employment Survey, see Forms of Employment, Australia, November 2008 (cat. no. 6359.0). This publication is available free of charge on the ABS website <www.abs.gov.au>.